State v. Partin

Appeal
from the Criminal Court for Putnam County No. 2015-CR-533
Gary McKenzie, Judge

The
Defendants, Darrell Partin and Chanda Partin, were indicted
for theft in connection with Mr. Partin's employment at
Tennessee Master Restoration ("TMR"), and the case
proceeded to a bench trial. During trial, the Defendants
discovered that the State had failed to produce documents in
the possession of TMR which supported the Defendants'
theory of the case. After a continuance, the trial court
concluded that the failure to produce the documents was a
violation of Tennessee Rule of Criminal Procedure 16 and of
the duty to disclose exculpatory material under Brady v.
Maryland, 373 U.S. 83 (1963). The trial court then
granted a mistrial and dismissed the charges with prejudice
based on the Rule 16 violation. The State appeals. After a
thorough review of the record, we conclude that the trial
court abused its discretion in dismissing the charges, and we
remand for further proceedings.

John
Everett Williams, P.J., delivered the opinion of the court,
in which Alan E. Glenn, J., joined.

OPINION

JOHN
EVERETT WILLIAMS, PRESIDING JUDGE

FACTUAL
AND PROCEDURAL HISTORY

The
charges at issue came about as the result of an employment
relationship "gone sour." TMR was operating as a
limited liability company with four members, one of whom
managed the operations. When the managing partner left, Mr.
Darrell Partin was hired to replace him, although the parties
dispute whether Mr. Partin had an ownership interest in the
company. Business increased under Mr. Partin's
management, but approximately one year later, Mr. Partin left
the company to start a rival business, taking most of
TMR's employees with him. According to TMR, Mr. Partin
left because of TMR's refusal to hire his wife, Ms.
Chanda Partin. According to the Defendants, Mr. Partin left
after discovering that TMR had included false statements on
its application for workers' compensation insurance.
During Mr. Partin's employment, he and Ms. Partin made
personal purchases using company accounts. After Mr. Partin
left the company, he was still in possession of cash payments
made for work performed by TMR, and he turned these payments
over to his civil attorney. Mr. Partin was charged with theft
of property valued at over $10, 000, and Ms. Partin was
charged with theft of property valued at over $2, 500. The
Defendants asserted that Mr. Partin was an owner of TMR, that
employees were routinely given advances or permitted to make
personal purchases with company accounts, and that their
purchases were accordingly authorized by TMR. They also
argued that the cash payments made for TMR work constituted
disputed funds because TMR stopped payment on Mr.
Partin's final two paychecks and because he was entitled
to partnership distributions.

During
discovery, the Defendants sought TMR's business records
related to employee compensation. In a motion for
supplemental discovery, the defense asked for various
business records, including a list of "all compensations
made to employees" from TMR for a period of three years,
including "pay, salary, reimbursements for business
expenses, bonuses, and gifts." The motion asserted that
the Defendants intended to demonstrate that they had the
authority to make purchases on the company credit cards and
charge accounts. The defense simultaneously moved for the
trial court to grant a subpoena to TMR for the records on the
same grounds. The State filed a response opposing the
subpoena to TMR on various grounds, including that some of
the records requested were not relevant, that some records
had disappeared at the time Mr. Partin left the company, and
that reconstructing or obtaining the records would be
prohibitively expensive. The response included an estimate of
$1, 200 for the requested employee compensation information.

On July
27, 2016, the trial court held a hearing on the discovery
dispute. The Defendants objected to the State's motion to
quash the subpoena, asserting that the State had no standing
to file the motion. The Defendants argued that Mr. Partin was
a partner in the company, that Ms. Partin was an employee of
the company, and that the records would support the
defense's theory about the Defendants' relationship
to the company and would demonstrate the company's past
patterns of practice.

Mr.
Steven Copeland testified at the hearing that he was a member
of TMR, a company which focused on restoring homes damaged by
fire or water and which also performed roofing. Prior to the
time Mr. Partin was hired in August of 2013, TMR had four
partners: Mr. Copeland, Mr. Copeland's father, Mr.
Copeland's uncle, and Mr. Tony Mott. The four were also
partners in a separate company which owned the real property
used by TMR. Mr. Mott managed the day-to-day operations of
TMR, and the other partners had little involvement other than
attendance at monthly meetings. Mr. Mott made a salary of
close to $50, 000 and took distributions from the
partnership. Mr. Copeland testified that in July 2013, Mr.
Mott became "burned out" and was given $60, 000 for
his ownership interest in TMR and an additional $40, 000 for
his ownership interest in the company which owned the real
property associated with TMR.

According
to Mr. Copeland, TMR at first offered Mr. Partin work on the
same terms as those under which Mr. Mott was employed: $50,
000 in salary with the opportunity to obtain a one-quarter
interest in the company after one year. Mr. Copeland
testified that Mr. Partin, however, negotiated for a higher
salary of $75, 000 and no partnership interest, and he began
to work for TMR in August 2013. He testified that the
agreements between TMR and Mr. Mott were in writing but that
there was no writing granting Mr. Partin a partnership
interest. Mr. Partin attended the monthly meetings of the
members of the company. TMR was satisfied with the quality of
Mr. Partin's work at the beginning of the employment
relationship.

According
to Mr. Copeland, in early 2014, Mr. Partin began to try to
convince the members of TMR to hire Ms. Partin. Mr. Copeland
testified that Ms. Partin worked for him from January 2013 to
October 2013 at an insurance company that he owned but that
he was dissatisfied with the quality of Ms. Partin's
work. He testified that TMR repeatedly refused to hire Ms.
Partin and that she was never an employee of TMR. He denied
asking TMR's credit card company to issue a card for Ms.
Partin and stated he was not aware at the time that she was
negotiating advertisements on behalf of the company. He
acknowledged that he was aware that Ms. Partin was helping
Mr. Partin at work, but he denied that she was employed by
TMR.

Mr.
Copeland testified that at the beginning of August 2014, Mr.
Partin and all of his employees resigned. Mr. Partin told Mr.
Copeland that the files, keys, cell phones, and information
about the company's current jobs were all on the
premises. Mr. Copeland's uncle spoke with one of the
employees who had resigned, and this employee returned to
work for TMR immediately. Mr. Copeland was not intimately
familiar with the business, but when he went to the building,
he felt that some equipment was missing. He asked the police
department to watch the TMR premises, and they observed Mr.
Partin at the building shortly after midnight, returning
equipment. Mr. Copeland testified that he also recovered
equipment that had been left at job sites.

Mr.
Copeland testified that Ms. Partin's name had been added
to the Lowe's credit card account and that she had
purchased children's play equipment, a table, and a
refrigerator for personal use. These items were found at the
Defendants' residence by the Tennessee Bureau of
Investigation ("TBI"). Mr. Copeland denied that
employees were permitted to make personal purchases on the
Lowe's credit account in order to take advantage of the
company's discount. He agreed that he stopped payment on
"the last couple" of Mr. Partin's paychecks but
could not recall his reasoning.

Upon
Mr. Partin's resignation, Mr. Copeland discovered that
his business records, including credit card statements, bank
statements, and bills, were missing. He hired an accountant
to attempt to reconstruct some of the business records from
the time of Mr. Partin's employment, and the records
produced by the accountant had been provided in discovery.

Mr.
Copeland testified that the payroll information was
"probably" on a computer system but would need to
be recreated. While he acknowledged that the payroll records
were not among the missing business records because his wife
"did those at the house," he testified that they
would have to be located "and I don't want her doing
that, so we'd have to hire a bookkeeper and accountant,
somebody to go back and get those." He agreed that the
payroll documents would not be "terribly difficult"
to find. Mr. Copeland stated he was not aware of any
occasions on which employees were "fronted" money
that was later offset in their compensation.

Mr.
Copeland answered various questions regarding TMR's
compliance with the statutory requirements of LLCs. He was
not aware that the addition or removal of a partner required
a supplemental report or that a partner's leaving would
be an event resulting in dissolution. Mr. Copeland agreed
that TMR was a construction, water restoration, and roofing
company and not a laundry service or an office. He
acknowledged that he was licensed to write insurance policies
and that an insurance premium would depend on the type of
business insured, but he denied intentionally falsifying his
application for workers' compensation insurance by
mischaracterizing the nature of TMR's business.

At the
end of the hearing, the trial court ordered the State to
produce the LLC documents that were in the possession of the
Secretary of State. The trial court noted that the State had
"the ability to work with the victim" to produce
certain documents, including partnership agreements that were
presumably within the possession of TMR. The trial court also
noted that information regarding prior partnership
distributions was essentially in the possession of the State
and that the State would need to produce the requested
information. In general, the prosecutor agreed that while Mr.
Copeland did not apparently know where the business records
were kept, the State would attempt to produce the documents
in the possession of TMR or determine that they did not
exist. The trial court noted that the parties could also
discuss the feasibility of Mr. Copeland printing his
statements from Lowe's and producing them, and that if
the parties could not come to an agreement, the defense could
issue a subpoena to Lowe's.

Regarding
the employee compensation records, the trial court asked the
prosecutor if there was any objection to producing
"records that exist on a computer that is local …
and we're talking about just printing off those
records." The prosecutor replied that he had no
objection and would "direct [Mr. Copeland] to do
that." The trial court summarized that the prosecution
would produce the payroll documents in existence on the
computer. The trial court, however, also determined that only
payroll documents created during the time period of Mr.
Partin's employment would be relevant. At the end of the
hearing, the prosecutor summarized his understanding that the
defense would send a letter listing the documents it was
requesting and that he would then "take that to Mr.
Copeland, and we'll work on getting those things if we
can, and explaining why we can't if we can't."

The
record reflects that the defense did indeed provide a letter
detailing the items requested. Regarding the compensation
documents, the letter noted that testimony revealed that Ms.
Vicki Copeland kept the documents at her home and that they
were "likely available electronically at little or no
costs." At a status conference on October 28, 2016, the
parties told the court that the prosecution had obtained
additional discovery and given it to the defense that
morning, and the hearing was rescheduled to give the defense
a chance to "see if … what they wanted is
there."

After
other pretrial proceedings, the Defendants waived their right
to a jury trial, and the bench trial commenced. The first
witnesses testified on May 16, 2017, after which the trial
was continued until July 20 and 21, when several other
witnesses testified. We summarize the proof at trial
primarily as it relates to the issues on appeal.

At
trial, the State introduced proof regarding the property
allegedly stolen by the Defendants. There was inconsistent
evidence regarding whether Mr. Matthew McClearen delivered
certain cash payments made for work performed by TMR to Mr.
Partin before or after Mr. Partin had left TMR. The cash
payments, which amounted to over $10, 000, were recovered
from Mr. Partin's civil attorney, who told TBI Special
Agent Darrin Shockey that he had been holding the money as
disputed funds since August 2014, when Mr. Partin left TMR.
Agent Shockey agreed that the Defendants stated that TMR had
stopped payment on Mr. Partin's final two paychecks.
There was also testimony regarding the circumstances of Mr.
Partin returning equipment which belonged to TMR shortly
after leaving to start his own business. Agent Shockey
introduced a spreadsheet of allegedly improper purchases made
by the Defendants. The purchases included numerous items
related to construction as well as household and other items.
There was testimony from various witnesses about whether
certain categories of items from the spreadsheet may have
been legitimate business expenses for TMR's office space,
for TMR's mascot dog, or as corporate gifts. Agent
Shockey testified that he executed a search warrant at the
Defendants' home and discovered a children's playset,
a refrigerator, and an air conditioner, collectively worth
over $2, 500, all of which had been purchased using TMR's
account at Lowe's.

The
State's witnesses also testified regarding the
destruction of some of the TMR business records following Mr.
Partin's departure. An employee of an information
technology company testified that he had attempted to recover
files from TMR's computers and had recovered certain
business records but was unable to recover others. While the
implication was that Mr. Partin destroyed the files, Mr.
Matthew McClearen, who was an employee of TMR and who left
the company to work at Romans Restoration, Mr. Partin's
rival business, ultimately testified that he had instructed
another employee to delete files from his computer because he
did not want anyone to discover that he had used it to view
pornography.

The
defense introduced evidence regarding various business
irregularities which it claimed led to the termination of the
business relationship between the parties. There was evidence
that TMR had submitted applications for workers'
compensation which may have characterized the business as a
cleaner and office and characterized a contractor who worked
as a roofer as performing cleaning. The defense also
attempted to establish that Mr. Partin had an ownership
interest in the company, that Mr. Mott believed Mr.
Mott's ownership interest was orally conferred by the
Copelands, and that the ...

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